Sprouts’ second quarter results reflected a balance between strong new store performance and ongoing challenges in core store traffic. While total sales grew in line with expectations, management highlighted that new locations and a differentiated product assortment drove most of the growth. CEO Jack Sinclair emphasized that “our differentiated and attribute-based assortment continues to resonate,” though the consumer environment remained difficult with customers making more selective healthy grocery purchases. Chief Financial Officer Curtis Valentine noted that e-commerce momentum and Sprouts brand products were key contributors, while lower comparable store sales and fixed cost deleverage weighed on margins.
Is now the time to buy SFM? Find out in our full research report (it’s free for active Edge members).
Sprouts (SFM) Q2 CY2026 Highlights:
- Revenue: $2.33 billion vs analyst estimates of $2.32 billion (4.7% year-on-year growth, in line)
- EPS (GAAP): $1.37 vs analyst estimates of $1.34 (1.9% beat)
- Adjusted EBITDA: $219.8 million vs analyst estimates of $213 million (9.5% margin, 3.2% beat)
- EPS (GAAP) guidance for the full year is $5.36 at the midpoint, missing analyst estimates by 3.4%
- Operating Margin: 7.5%, in line with the same quarter last year
- Locations: 490 at quarter end, up from 455 in the same quarter last year
- Same-Store Sales fell 1% year on year (10.2% in the same quarter last year)
- Market Capitalization: $8.03 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sprouts’s Q2 Earnings Call
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Edward Kelly (Wells Fargo) asked about July comp performance and the impact of Cyclospora. CFO Curtis Valentine clarified that July was slightly negative but within guidance, and the outbreak’s impact was isolated and being closely monitored.
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Leah Jordan (Goldman Sachs) questioned the narrowing comp guidance and optimism on returning to growth. CEO Jack Sinclair cited the unpredictable macro environment and inflationary pressures as key factors, but reaffirmed confidence in the underlying strategy.
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Tom Palmer (JPMorgan) inquired about EBIT margin outlook and incremental investments. Valentine attributed margin pressure to elevated fuel costs and increased new store openings, and noted that vendor participation in loyalty programs was still in early stages.
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Kelly Bania (BMO Capital Markets) asked about units per basket and balancing price investments between fresh and nonperishable categories. President Nick Konat explained that the strategy centers on customer priorities across both fresh and shelf-stable items, with innovation and selective price investments aimed at boosting accessibility.
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Rupesh Parikh (Oppenheimer & Company) addressed competitive pricing and new store ramp. Sinclair and Valentine responded that Sprouts remains focused on competitive pricing in produce and has seen new stores outperform, even in tougher markets.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be watching (1) the pace and success of new store openings, particularly in less-penetrated markets; (2) the effectiveness of targeted affordability and loyalty initiatives in driving sustained increases in traffic and basket size; and (3) continued progress in supply chain and self-distribution efforts, which are critical for supporting operational efficiency and margin stability. Broader macroeconomic factors and consumer behavior shifts will also be key signposts.
Sprouts currently trades at $86.75, up from $79.16 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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